Why Navitas Semiconductor Stock Crashed in November
- - Why Navitas Semiconductor Stock Crashed in November
Lee Samaha, The Motley FoolDecember 6, 2025 at 5:50 AM
0
Key Points -
The partnership with Nvidia is expected to bear fruit in 2027.
Navitas is aggressively pivoting toward higher-margin end markets, such as AI data centers.
There's no evidence to suggest any slowdown in AI and data center capital spending as yet.
10 stocks we like better than Navitas Semiconductor ›
Shares in Navitas Semiconductor (NASDAQ: NVTS) declined by 35.1% in November, according to data provided by S&P Global Market Intelligence. The move came as the market took a more negative view of AI-related stocks. One of the market's concerns is that capital spending on AI is forming a bubble that will burst, leaving the valuations of stocks like Navitas exposed. Here's what you before investing in Navitas.
Navitas pivots toward AI/data center end markets
A loss-making small-cap company that's actively pivoting away from its previous core end markets. Navitas CEO Chris Allexandre was crystal clear on the company's last earnings call: "We are deprioritizing lower margin, short life cycle projects, transactional markets and customers such as mobile and selected China-based segment to redeploy capacity and attention to durable high-power program."
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now, when you join Stock Advisor. See the stocks »
The new focus of the company is on high-power solutions for hyperscalers, top-tier customers, and "leaders in our focus markets, AI data centers, performance computing, energy and grid infrastructure, and industrial electrification." These end markets include Navitas' partnership with Nvidia on developing solutions for the next generation of 800V high-voltage direct current (HVDC) data centers, scheduled for 2027.
As such, when the market became a bit cautious about the AI-related sector in November, it was natural that Navitas would be particularly badly affected.
Why the market is worried about AI and Navitas
Perhaps the market's most significant concern regarding the AI market stems from the fear that the massive capital investments made now won't prove productive enough to sustain the current rate of growth in the future. There's undoubtedly some truth in that argument, as history demonstrates that many unproductive investments will be made in the rush to adopt new technologies. However, it also teaches that, while growth in new technologies does tend to overshoot, there's usually an underlying uptrend that the market settles on.
Unfortunately, it's tough to determine precisely where we stand with regard to that trendline.
An AI concept.
Image source: Getty Images.
Where next for Navitas
However, what we do know is that there are no signs of any slowdown in the market now. We also know that Navitas is one of only two companies (the other is ON Semiconductor) that provide solutions from the wall (silicon carbide semiconductors that convert AC power from the grid to the 800V HVDC) to the core (gallium nitride chips that convert the 800V HVDC down to much lower DC voltages used to power processors). Management is expecting material contributions to profitability from it in 2027.
As such, the dip in the stock price could create a buying opportunity in a company with a bright future.
Should you invest $1,000 in Navitas Semiconductor right now?
Before you buy stock in Navitas Semiconductor, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Navitas Semiconductor wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $556,658!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,124,157!*
Now, it’s worth noting Stock Advisor’s total average return is 1,001% — a market-crushing outperformance compared to 194% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.
See the 10 stocks »
*Stock Advisor returns as of December 1, 2025
Lee Samaha has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool recommends ON Semiconductor. The Motley Fool has a disclosure policy.
Source: “AOL Money”
